A. [§ 3.95] Confidential Or Fiduciary Relationship

• Jurisdiction: Maryland

A. [§ 3.95] Confidential or Fiduciary Relationship

Fiduciary duties and duties arising out of confidential relationships are the most typical relationships from which constructive fraud arises. Dowling v. A.R.T. Inst. of Washington, Inc., 372 F. Supp. 3d 274, 295 (D. Md. 2019) ("Constructive fraud generally arises in a context of trust or confidence, such as a fiduciary duty or confidential relationship." (citation omitted)). A confidential relationship arises whenever confidence is placed by one person in another and accepted by that other person. Characteristic of this relationship is the dominion and influence exercised by one person over the other. Midler v. Shapiro, 33 Md. App. 264, 364 A.2d 99 (1976). An exhaustive consideration of the similarities and differences between fiduciary relationships and confidential relationships can be found in Lasater v. Guttmann, 194 Md. App. 431, 455-56, 5 A.3d 79, 93-94 (2010), cert. denied, 417 Md. 502, 10 A.3d 1181 (2011), which quotes at length from Buxton v. Buxton, 363 Md. 634, 654, 770 A.2d 152 (2001).

As to husbands and wives, the Lasater court commented thusly:

[I]n Maryland, a husband and wife are not true fiduciaries, as a matter of law, absent an agreement establishing that relationship. (footnote omitted) Moreover, Maryland law also makes plain that a husband and wife are presumed not to occupy a confidential relationship. Upman v. Clarke, 359 Md. 32, 42, 753 A.2d 4 (2000); Bell v. Bell, 38 Md. App. 10, 13-14, 379 A.2d 419 (1977). (footnote omitted) The Court in Upman explained that, while there are some relationships that are presumed confidential, "[o]therwise, and particularly in family relationships, such as parent-child and husband-wife, the existence of a confidential relationship is an issue of fact and is not presumed as a matter of law." 359 Md. at 42.

Lasater, 194 Md. App. at 456-57, 5 A.3d at 94.

Whenever a confidential or fiduciary relationship is established, the burden falls upon the dominant or trusted party to show that his or her conduct was proper. Desser v. Woods, 266 Md. 696, 296 A.2d 586 (1972); Midler, 33 Md. App. 264, 364 A.2d 99. Hence, at trial, the significance of establishing a confidential or fiduciary relationship is great, because the plaintiff can then shift the burden of production—not the burden of persuasion—to the defendant.

Moreover, where a confidential relationship or a fiduciary relationship exists, the ordinary duty of one to make inquiry to discover the...